Local, county and state officials break ground Thursday, July 26, 2018, at the Campus Parkway and East Childs Avenue intersection during a ceremony for the $30 million second phase of the Campus Parkway extension project. Vikaas Shankervshanker@mercedsunstar.com

Local, county and state officials break ground Thursday, July 26, 2018, at the Campus Parkway and East Childs Avenue intersection during a ceremony for the $30 million second phase of the Campus Parkway extension project. Vikaas Shankervshanker@mercedsunstar.com

A roadway expansion project that aims to improve traffic and generate economic activity between the UC Merced and Highway 99 is entering its next phase, according to city, county and state officials.

Several local and state officials discussed the significance of the Campus Parkway expansion Thursday during a groundbreaking ceremony for the second segment of the road that aims to connect Highway 99 with UC Merced as part of the greater “Merced Loop System,” which connects surrounding communities.

The second phase of construction of the four-lane road includes a concrete overpass over the BNSF railroad line with an exit onto Highway 140, officials said. This portion of the project is expected to cost about $30 million and be completed in 2021.

The project is funded by the Senate Bill 1 gas tax bill signed by Gov. Jerry Brown last year, officials said. The bill raised fees 12 cents per gallon for gas, increased 20 cents per gallon for diesel fuel and another 4 percent tax increase for diesel and a vehicle license fee ranging between $25 and $175 dependent on the value of the vehicle.

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The gas tax, however, and potential funding faces a threat if voters approve a November ballot measure that aims to repeal it.

Without the gas tax, the Campus Parkway project could be a pipe dream, according to Merced County Supervisor Lloyd Pareira.

“This would be a 20 to 30-year plan instead of a three to five-year plan,” he said, thanking State Sen. Anthony Cannella, R-Ceres, and Assemblymember Adam Gray, D-Merced, for their work in shifting “SB1” funding to the project.

Gray said a “strong working relationship” with Cannella helped draw the state funding resource to Campus Parkway, UC Merced and the Merced County region, which he said is often overlooked when it comes to the state politics.

“In California, when it comes to allocate the resources from Sacramento, just too often we get overlooked,” Gray said. “In this case, we didn’t.”

The construction of Campus Parkway is expected to bring economic growth in the form of 5,800 jobs and $250 million in direct and indirect revenue, Merced Mayor Mike Murphy said, adding it will connect Merced residents to economic centers created by the UC Merced area expansion and planned industrial and commercial developments along Campus Parkway.

Next month, UC Merced is expected to open the first phase of its campus expansion, according to Edward Klotzbier, a UC Merced vice chancellor.

The campus is expected to enroll up to 10,000 students over next three years, Klotzbier said, noting projects such as the Campus Parkway extension, El Capitan Hotel renovation and the UC Merced 2020 expansion project signals to business and industry leaders that Merced is open for development.

Next year, work will start on the third phase of the project, extending Campus Parkway north from Highway 140 through East Olive Avenue to East Yosemite Avenue, about a half mile east of Lake Road. That segment of the project is expected to be complete by 2023.

The entire project is expected to cost about $100 million, officials said.